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Tuesday, 13 October 15
DRY BULK SHIPPING FLEET NET EXPANSION WAS 1.3% DURING THIRD QUARTER, BUT ORDERBOOK REDUCED TO 17% OF THE TRADING FLEET
 If the dry bulk market is to rebound on a sustainable level, it needs to limit the tonnage expansion, at least until demand picks up again, as China’s slowdown is curbing freight rates. As such, the high level of demolition activity over the first half of the year, helped rates pick up during the third quarter. According to dry bulk ship owner Pacific Basin, Handysize and Handymax market spot rates averaged US$6,000 and US$8,340 per day net respectively in the third quarter of 2015. While only marginally up compared to the same period last year, these average market rates represent a 23% and 30% improvement on the previous quarter.
According to Pacific Basin’s analysis, “the quarter on quarter improvement was largely driven by healthier conditions in the Atlantic on strong South American agricultural exports. Atlantic spot market rates reached early 2014 levels and have since declined as the South American season subsides. By contrast, the Pacific freight market has been relatively flat, demonstrating only a moderate improvement through July which has since been reversed. Weak demand growth in the Pacific is largely due to the continued slowdown in Chinese coal and iron ore imports which together represent a large proportion of overall dry bulk trade”.
Detailing the demand side of things, the ship owner noted that “year-to-date coal imports are 30% down year on year while iron ore imports have been largely flat. Year-to-date Chinese imports of a basket of seven minor bulks are down 2% year on year due mainly to a weaker start to 2015. Minor bulk trade volumes since March were higher than in the same months in 2014 and have lent some support to demand for Handysize and Handymax ships. In particular, Chinese imports of bauxite increased year on year, and imports of soybeans and cereal grains are substantially up. Chinese steel exports have also increased”.
It continued by noting that “on the vessel supply side, the pace of newbuilding deliveries in 2015 has closely tracked 2014 when we saw the lowest rate of new ship additions in 15 years. The high level of scrapping in the first half of 2015 gave way to reduced scrapping in the third quarter due to the improved freight market. As a result, the overall dry bulk fleet expanded by 1.3% net during the quarter, having previously seen no net growth since the end of January. The overall dry bulk orderbook has reduced to about 17% of the trading fleet, but delays, cancellations, conversions and shipyard defaults – primarily in China – are leading to fewer actual deliveries than scheduled at the start of the year. The ship supply surplus built up in 2010-2012 and slowdown in Chinese raw materials imports – especially coal – continue to drive overall weakness, and we continue to manage the business for a weak market in the medium term”.
Pacific Basin also said that “secondhand values have been substantially flat in recent months. Benchmark five year old 32,000 dwt Handysize bulk carriers are currently valued by Clarksons Platou at US$13.0 million which is unchanged since May. Handysize newbuildings are valued at US$20.5 million and the significant gap between newbuilding and secondhand prices continues to discourage new ship ordering and favours buying secondhand ships”.
It concluded by noting that “this weakness will continue to affect shipping businesses and could result in more companies experiencing financial distress along the lines of Daiichi Chuo Kisen Kaisha’s recent filing for bankruptcy protection”.
In a separate report, BIMCO said that “when traditional demand growth is not increasing, we need to look harder for future growth. Here the glut of high-iron-content ore in the international markets and the following low prices may finally bring around a sizeable substitution in consumption by Chinese steel mills, away from the domestically produced low-iron-content ore, in favour of imports”. Calculations done by BIMCO show that monthly imports into China could be 20mt higher per month (+26%). A total of an extra 240 million tons on an annual basis could bring deployment for around 155 Capesizes, assuming an unchanged distribution between Australian and Brazilian imports (75%/25%). Last year, Australia grew its share significantly as 90% of Chinese incremental demand came from Australia. As Brazilian miner Vale is expecting to grow its output over the next year, this would improve the prospects. Working against would be more Brazilian ore transported on 400,000-DWT Valemax class ships operated by the miner itself or related parties”, BIMCO noted in its report.
As such, it concludes that “for the coming months: September-November, BIMCO expects the supply of new ships to stay subdued and slow paced towards the end of the year. The deteriorating demand-side conditions are expected to be somewhat reversed as we move into the stronger months of the year. The vital commodities, coal and iron ore, are both expected to be in higher demand in coming months, enhancing owners’ and operators’ opportunities to find employment for their ships. Altogether this should support the freight rates although no large-scale improvement to the fundamental balance is likely to develop”.
Source: Nikos Roussanoglou, Hellenic Shipping News
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Monday, 05 October 15
Q1' 16 CFR SOUTH CHINA COAL SWAP CLOSED US$ 48.05 PER TON
COALspot.com: API 8 CFR South China Coal swap for 4Q’ 2015 delivery down US$ 0.47 (0.96 %) per ton month over month.
A commodity swap is ...
Monday, 05 October 15
SMALL DECLINE IN 2014 SHIP OPERATING COSTS - MOORE STEPHENS
Total annual operating costs in the shipping industry fell by an average of 0.8% in 2014. This compares with the 0.3% average fall in costs recorde ...
Sunday, 04 October 15
THE INDO-INDIA FREIGHT MARKET REMAINS UNDER PRESSURE
COALspot.com: The BDI closed on Friday (2 Oct 2015) at 889 points, down by 54 points compared to previous Friday's closing ( 24 Sept 2015) of 9 ...
Friday, 02 October 15
COAL PRODUCTION IN THE UNITED STATES DECREASED THIS WEEK - EIA
COALspot.com – United States the world’s second largest coal producer has produced approximately totaled an estimated 17.5 million shor ...
Thursday, 01 October 15
SOUTH KOREA'S KOMIPO SEEKS SPOT BITUMINOUS COAL SUPPLIES
COALspot.com: South Korean state-owned utility Korea Midland Power (KOMIPO) issued an new tender for 265,000 Metric Tons (MT) of minimum 4,600 kcal ...
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- IHS Mccloskey Coal Group - USA
- Mjunction Services Limited - India
- Salva Resources Pvt Ltd - India
- Kalimantan Lumbung Energi - Indonesia
- Deloitte Consulting - India
- Bhushan Steel Limited - India
- Independent Power Producers Association of India
- Anglo American - United Kingdom
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Madhucon Powers Ltd - India
- Star Paper Mills Limited - India
- Vijayanagar Sugar Pvt Ltd - India
- Savvy Resources Ltd - HongKong
- Coalindo Energy - Indonesia
- Directorate Of Revenue Intelligence - India
- Samtan Co., Ltd - South Korea
- Krishnapatnam Port Company Ltd. - India
- Karaikal Port Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Parry Sugars Refinery, India
- OPG Power Generation Pvt Ltd - India
- Barasentosa Lestari - Indonesia
- Thai Mozambique Logistica
- Sree Jayajothi Cements Limited - India
- Semirara Mining and Power Corporation, Philippines
- Billiton Holdings Pty Ltd - Australia
- PetroVietnam Power Coal Import and Supply Company
- Ceylon Electricity Board - Sri Lanka
- Mercator Lines Limited - India
- Maheswari Brothers Coal Limited - India
- Mintek Dendrill Indonesia
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Lanco Infratech Ltd - India
- Meralco Power Generation, Philippines
- Neyveli Lignite Corporation Ltd, - India
- Asmin Koalindo Tuhup - Indonesia
- Uttam Galva Steels Limited - India
- Gujarat Sidhee Cement - India
- Commonwealth Bank - Australia
- Power Finance Corporation Ltd., India
- Bank of Tokyo Mitsubishi UFJ Ltd
- Indogreen Group - Indonesia
- Jindal Steel & Power Ltd - India
- Ministry of Transport, Egypt
- Africa Commodities Group - South Africa
- Aditya Birla Group - India
- Metalloyd Limited - United Kingdom
- Chettinad Cement Corporation Ltd - India
- Planning Commission, India
- Bukit Baiduri Energy - Indonesia
- Kumho Petrochemical, South Korea
- Global Coal Blending Company Limited - Australia
- IEA Clean Coal Centre - UK
- Sakthi Sugars Limited - India
- Rashtriya Ispat Nigam Limited - India
- Ministry of Mines - Canada
- Timah Investasi Mineral - Indoneisa
- Borneo Indobara - Indonesia
- Simpson Spence & Young - Indonesia
- Videocon Industries ltd - India
- Tata Chemicals Ltd - India
- Orica Mining Services - Indonesia
- Cigading International Bulk Terminal - Indonesia
- Trasteel International SA, Italy
- Medco Energi Mining Internasional
- London Commodity Brokers - England
- Kapuas Tunggal Persada - Indonesia
- Siam City Cement - Thailand
- VISA Power Limited - India
- Wilmar Investment Holdings
- Indo Tambangraya Megah - Indonesia
- PNOC Exploration Corporation - Philippines
- Electricity Generating Authority of Thailand
- Marubeni Corporation - India
- Baramulti Group, Indonesia
- Energy Development Corp, Philippines
- Economic Council, Georgia
- Vedanta Resources Plc - India
- Port Waratah Coal Services - Australia
- Ministry of Finance - Indonesia
- Aboitiz Power Corporation - Philippines
- Iligan Light & Power Inc, Philippines
- Eastern Coal Council - USA
- LBH Netherlands Bv - Netherlands
- Pipit Mutiara Jaya. PT, Indonesia
- Kohat Cement Company Ltd. - Pakistan
- Toyota Tsusho Corporation, Japan
- Xindia Steels Limited - India
- McConnell Dowell - Australia
- Agrawal Coal Company - India
- Australian Commodity Traders Exchange
- Global Business Power Corporation, Philippines
- Dalmia Cement Bharat India
- TNB Fuel Sdn Bhd - Malaysia
- Malabar Cements Ltd - India
- Kaltim Prima Coal - Indonesia
- Wood Mackenzie - Singapore
- Bhatia International Limited - India
- Parliament of New Zealand
- San Jose City I Power Corp, Philippines
- White Energy Company Limited
- The Treasury - Australian Government
- Electricity Authority, New Zealand
- International Coal Ventures Pvt Ltd - India
- Essar Steel Hazira Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Bukit Makmur.PT - Indonesia
- India Bulls Power Limited - India
- Altura Mining Limited, Indonesia
- PTC India Limited - India
- Central Electricity Authority - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Manunggal Multi Energi - Indonesia
- Ambuja Cements Ltd - India
- Pendopo Energi Batubara - Indonesia
- Indonesian Coal Mining Association
- Singapore Mercantile Exchange
- Indika Energy - Indonesia
- Edison Trading Spa - Italy
- Gujarat Mineral Development Corp Ltd - India
- Bharathi Cement Corporation - India
- Makarim & Taira - Indonesia
- Gujarat Electricity Regulatory Commission - India
- SMC Global Power, Philippines
- Oldendorff Carriers - Singapore
- Sindya Power Generating Company Private Ltd
- Sarangani Energy Corporation, Philippines
- Kobexindo Tractors - Indoneisa
- Posco Energy - South Korea
- Semirara Mining Corp, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Thiess Contractors Indonesia
- SN Aboitiz Power Inc, Philippines
- The State Trading Corporation of India Ltd
- AsiaOL BioFuels Corp., Philippines
- Kideco Jaya Agung - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Goldman Sachs - Singapore
- Interocean Group of Companies - India
- Australian Coal Association
- Latin American Coal - Colombia
- GMR Energy Limited - India
- GVK Power & Infra Limited - India
- ASAPP Information Group - India
- PowerSource Philippines DevCo
- Petrochimia International Co. Ltd.- Taiwan
- Bhoruka Overseas - Indonesia
- Leighton Contractors Pty Ltd - Australia
- New Zealand Coal & Carbon
- GN Power Mariveles Coal Plant, Philippines
- Indian Energy Exchange, India
- Vizag Seaport Private Limited - India
- Ind-Barath Power Infra Limited - India
- Binh Thuan Hamico - Vietnam
- Sojitz Corporation - Japan
- European Bulk Services B.V. - Netherlands
- Romanian Commodities Exchange
- Bulk Trading Sa - Switzerland
- Formosa Plastics Group - Taiwan
- Globalindo Alam Lestari - Indonesia
- Eastern Energy - Thailand
- Larsen & Toubro Limited - India
- Straits Asia Resources Limited - Singapore
- CIMB Investment Bank - Malaysia
- Attock Cement Pakistan Limited
- Minerals Council of Australia
- Miang Besar Coal Terminal - Indonesia
- Orica Australia Pty. Ltd.
- Jorong Barutama Greston.PT - Indonesia
- Georgia Ports Authority, United States
- Cement Manufacturers Association - India
- South Luzon Thermal Energy Corporation
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Bayan Resources Tbk. - Indonesia
- Meenaskhi Energy Private Limited - India
- Sical Logistics Limited - India
- Tamil Nadu electricity Board
- Bahari Cakrawala Sebuku - Indonesia
- Maharashtra Electricity Regulatory Commission - India
- Central Java Power - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- TeaM Sual Corporation - Philippines
- Therma Luzon, Inc, Philippines
- Heidelberg Cement - Germany
- Rio Tinto Coal - Australia
- SMG Consultants - Indonesia
- Kartika Selabumi Mining - Indonesia
- Grasim Industreis Ltd - India
- Mercuria Energy - Indonesia
- Energy Link Ltd, New Zealand
- Siam City Cement PLC, Thailand
- Jaiprakash Power Ventures ltd
- Renaissance Capital - South Africa
- Banpu Public Company Limited - Thailand
- Riau Bara Harum - Indonesia
- Price Waterhouse Coopers - Russia
- Kepco SPC Power Corporation, Philippines
- MS Steel International - UAE
- Global Green Power PLC Corporation, Philippines
- Coastal Gujarat Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- ICICI Bank Limited - India
- Intertek Mineral Services - Indonesia
- Carbofer General Trading SA - India
- Chamber of Mines of South Africa
- Bangladesh Power Developement Board
- The University of Queensland
- Asia Pacific Energy Resources Ventures Inc, Philippines
- GAC Shipping (India) Pvt Ltd
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Sinarmas Energy and Mining - Indonesia
- Coal and Oil Company - UAE
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